Bill Text: IA HF2465 | 2019-2020 | 88th General Assembly | Introduced

---

Bill Title: A bill for an act relating to pharmacy benefit managers and the cost of prescription drug benefits, and including applicability provisions.

Spectrum: Partisan Bill (Democrat 41-1)

Status: (Introduced - Dead) 2020-02-20 - Introduced, referred to Commerce. H.J. 314. [HF2465 Detail]

Download: Iowa-2019-HF2465-Introduced.html

---

House File 2465 - Introduced
HOUSE FILE 2465
BY PRICHARD , NIELSEN , FORBES ,
OURTH , GASKILL , JAMES ,
KURTZ , STECKMAN , JUDGE ,
BENNETT , MASCHER , DERRY ,
LENSING , DONAHUE , KURTH ,
M. SMITH , WOLFE , B.
MEYER , OLDSON , KONFRST ,
BRECKENRIDGE , STAED ,
McKEAN , HALL , HUNTER ,
WILBURN , THEDE , WILLIAMS ,
R. SMITH , McCONKEY ,
ISENHART , ABDUL-SAMAD ,
WESSEL-KROESCHELL ,
SUNDE , MATSON , BEARINGER ,
BROWN-POWERS , KRESSIG ,
JACOBY , RUNNING-MARQUARDT ,
KACENA , and ANDERSON
A BILL FOR
An Act relating to pharmacy benefit managers and the cost of
prescription drug benefits, and including applicability
provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 5406YH (4) 88
ko/rn

H.F. 2465
Section 1. NEW SECTION . 514M.1 Definitions.
As used in this chapter, unless the context otherwise
requires:
1. “Commissioner” means the commissioner of insurance.
2. “Cost sharing” means any coverage limit, copayment,
coinsurance, deductible, or other out-of-pocket expense imposed
on a covered person.
3. “Covered person” means the same as defined in section
514J.102.
4. “Dispenser” means the same as defined in section 124.101.
5. “Health benefit plan” means the same as defined in
section 514J.102.
6. “Health carrier” means the same as defined in section
514J.102.
7. “Pharmacy benefit manager” means a person who, pursuant
to a contract or other relationship with a health carrier,
either directly or through an intermediary, manages a
prescription drug benefit provided by the health carrier.
8. “Prescription drug benefit” means a health benefit plan
providing for third-party payment or prepayment of prescription
drugs.
9. “Rebate” means all discounts and other negotiated price
concessions paid directly or indirectly by a pharmaceutical
manufacturer or other entity, other than a covered person,
in the prescription drug supply chain to a pharmacy benefit
manager, and which may be based on any of the following:
a. A pharmaceutical manufacturer’s list price for a
prescription drug.
b. Utilization.
c. To maintain a net price for a prescription drug for
a specified period of time for the pharmacy benefit manager
in the event the pharmaceutical manufacturer’s list price
increases.
d. Reasonable estimates of the volume of a prescribed drug
that will be dispensed by a pharmacy to covered persons.
-1-
LSB 5406YH (4) 88
ko/rn 1/ 4

H.F. 2465
10. “Trade secret” means the same as defined in section
550.2.
Sec. 2. NEW SECTION . 514M.2 Cost sharing —— prescription
drug benefit.
1. If a health carrier provides a prescription drug benefit
to a covered person under a health benefit plan, and the
prescription drug benefit is managed by a pharmacy benefit
manager, the pharmacy benefit manager shall reduce, at the
point of sale, any cost sharing for a prescription drug by any
of the following:
a. A dollar amount that equals not less than fifty-one
percent of the aggregate rebates received by the pharmacy
benefit manager for that particular prescription drug.
b. A dollar amount greater than the dollar amount in
paragraph “a” .
2. A pharmacy benefit manager shall not increase a
participating pharmacy’s, participating pharmacist’s, or other
participating dispenser’s cost of participation to offset the
reduction in cost sharing pursuant to subsection 1.
3. In complying with this section, a pharmacy benefit
manager and the pharmacy benefit manager’s agents shall
not publish or otherwise disclose, directly or indirectly,
any information regarding the actual amount of rebates the
pharmacy benefit manager receives for a specific prescription
drug or from a specific pharmaceutical manufacturer. Rebate
information is a trade secret under chapter 550 and is a
confidential record under section 22.7, subsection 3.
4. A pharmacy benefit manager shall have a written agreement
with any third-party vendor or downstream entity requiring
the third-party vendor or downstream entity to comply with
subsection 3 if the third-party vendor or downstream entity
receives or has access to the pharmacy benefit manager’s rebate
information in the course of performing any services on behalf
of the pharmacy benefit manager.
Sec. 3. NEW SECTION . 514M.3 Rules.
-2-
LSB 5406YH (4) 88
ko/rn 2/ 4

H.F. 2465
The commissioner of insurance shall adopt rules pursuant to
chapter 17A as necessary to administer this chapter.
Sec. 4. NEW SECTION . 514M.4 Enforcement.
The commissioner may take any action within the
commissioner’s authority to enforce compliance with this
chapter.
Sec. 5. NEW SECTION . 514M.5 Applicability.
This chapter is applicable to a health benefit plan that is
delivered, issued for delivery, continued, or renewed in this
state on or after January 1, 2021.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
This bill relates to pharmacy benefit managers, health
carriers, and the cost of prescription drug benefits.
“Pharmacy benefit manager” is defined in the bill as a person
who, pursuant to a contract or an employment relationship with
a health carrier, either directly or through an affiliate or
intermediary, manages a prescription drug benefit provided by
the health carrier. The bill defines a “health carrier” as an
entity subject to the insurance laws and regulations of this
state, or subject to the jurisdiction of the commissioner,
including an insurance company offering sickness and accident
plans, a health maintenance organization, a nonprofit health
service corporation, a plan established pursuant to Code
chapter 509A for public employees, or any other entity
providing a plan of health insurance, health care benefits, or
health care services.
The bill provides that if a health carrier provides a
prescription drug benefit to a covered person under a health
benefit plan, and the prescription drug benefit is managed
by a pharmacy benefit manager, the pharmacy benefit manager
must reduce, at the point of sale, any cost sharing for a
prescription drug by either a dollar amount that equals not
less than 51 percent of the aggregate rebates received by the
-3-
LSB 5406YH (4) 88
ko/rn 3/ 4

H.F. 2465
pharmacy benefit manager for that particular prescription
drug, or a dollar amount greater than that amount. The
bill prohibits a pharmacy benefit manager from increasing a
participating pharmacy’s, participating pharmacist’s, or other
participating dispenser’s cost of participation to offset the
required reduction in cost sharing.
A pharmacy benefit manager is prohibited from disclosing
any information regarding the actual amount of rebates the
pharmacy benefit manager received for a specific drug, or from
a specific pharmaceutical manufacturer in order to comply with
the cost-sharing requirement. Rebate information is protected
as a trade secret and is a confidential record. A pharmacy
benefit manager is also required to have an agreement with the
pharmacy benefit manager’s third-party vendors and downstream
entities as necessary to ensure the information is protected
as a trade secret.
The bill requires the commissioner of insurance to adopt
rules as necessary to administer the provisions of the bill.
The bill also allows the commissioner to take any action within
the commissioner’s authority to enforce compliance with the
provisions of the bill.
The bill is applicable to health benefit plans that are
delivered, issued for delivery, continued, or renewed in this
state on or after January 1, 2021.
-4-
LSB 5406YH (4) 88
ko/rn 4/ 4